Sri Lanka parliament votes to expand President’s powers amid hopes and fears

ECONOMYNEXT – Sri Lanka’s parliament has voted with more than a two thirds majority to expand the powers of the President and terminate an institution that approved the appointment of judges, the police chief amid warnings that the sovereignty of the people and rule of law had been given a blow.

Ruling party legislators said the changes would improve decision making and implementation of policy by the President, while the opposition said it would lead to a dictatorship by altering power balance between the executive, legislature and judiciary.

The 225 member assembly voted 156 for and 56 against with 213 out of 225 members present.

Among those who vote in favour was Diana Gamage, the secretary of the main opposition Samagi Jana Balawegaya.

Ex-Prime Minister Ranil Wickremesinghe’s United National Party which won one seat was absent from the debate with no member appointed.

The 20th amendment to the constitution overturned a 19th amendment that sought to limit presidential powers, establish the independence of the judiciary and the public service by approving the appointment of judges and senior officials including the police chief.

Hopes for Better Times

Justice Minister Ali Sabry said the changes would allow President Gotabaya Rajapaksa to make decisions, improve national security and bring prosperity to the nation.

“The constitutional change will strengthen the executive, ensure national security and bring prosperity and vicarious joy and happiness (sukither mudither) to the nation,” Sabry said told parliament.

He said an entirely new constitution would be enacted within a year and the elections would also be reformed.

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Ruling party legislators said the earlier 19th amendment had to be changed as personality conflicts with former President Maithripala Sirisena and Prime Minister Wickremesinghe hamstrung policy had led to a suicide attack by Islamist extremists and economic decline.

Opposition legislators and freedom advocates said the 20th amendment to the Sri Lanka’s constitution will undermine the rule of law and strengthen the executive at the expense of the legislature and the judiciary.

Opposition legislator Lakshman Kiriella said his party opposed the changes as it made the parliament a rubber stamp.

The change ended an independent constitutional council which approved senior appointment including judges, the police chief and elections commissioners and replaced it with a parliamentary council which could give its views.

Rule of Law

Opposition legislators also opposed that bringing back the procedure of ’emergency laws’ with limited judicial review limited wider debate and the room for the people to oppose legislation.

Opposition legislator Eran Wickremaratne warned that undermining the independence of the judiciary and rule of law would discourage investors and hurt the economy as an earlier expropriation law had done.

“Investors want to know that their rights are assured and there is protection,” he told parliament.

“Undermining rule of law would discourage investment.”

He warned that Sri Lanka had no process for post-enactment judicial review of law.

Sri Lanka’s Supreme Court heard over three dozen petitions against the amendment and gave its approval with changes to four clauses.

Opposition legislators protested the including of several provisions that had not been included in the original bill or had not been submitted to the Supreme Court such as the expansion of the number of Supreme Court and Court of Appeal judges.

Sovereignty

Seasoned political analysts said the problem went far deeper than the 20th amendment and was simply a new step that in a long slide that had been taking place from shortly after independence that had robbed the sovereignty of the people.

“The people are the real owners of sovereignty both in terms of the classical liberal opinion and the domestic and international law,” Victor Ivan, a political analysts and a former newspaper editor who had agitated against the excessive presidential powers and the undermining of the judiciary said.

“In other words, the state power lies with the society and the rulers elected by the people are subject to the will and the control of the people.

“In this context, the 20th Amendment can be considered a constitutional adjustment that undermines and lets down the sovereignty of the people.”

He said Sri Lanka had denied citizenship to Indian plantations workers in 1948 and 1949, the official language action had deprived Tamil people reasonable use of their language and in 1972 the independence of the civil service had ended.

“The crisis Sri Lanka is facing now cannot be considered a one that has been caused by the pandemic,” Ivan said.

“It is a crisis that has been growing steadily before, and the outbreak of the pandemic can be said to have only intensified the volume of the crisis.”

The constitutional council that was terminated in part sought to replace the Civil Service Commission which had the powers to appoint, take disciplinary action or remove public officials, giving tenure security to all who acted fairly and legally which was abolished in 1972.

Its functions were taken over by the cabinet in 1972 and the President in 1978 and the institution of permanent secretary was killed, leading to a politicized public service and sacking impermanent secretaries who opposed arbitrary political orders.

Opposition legislators blamed the 19th amendment and for the economic downturn in recent years.

Monetary Instability

Other analysts however have pointed out that largely socialist policies involving price controls, a ‘ill-gotten gains’ tax that amounted to expropriation, a 100 day program that undermined state finances in 2015 and anti-privatization led to the economic decline.

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The entire program was based on monetary instability involving currency depreciation (Real Effective Exchange Rate targeting) and liquidity injections which led to two currency crises and the collapse of the rupee from 131 to 150 to the dollar in the first crisis and 151 to 182 in the second.

Each currency crisis led to a negative consumption and output shock, expanding the budget deficit and domestic debt as revenues collapsed while foreign debt inflated from the Real Effective Exchange Rate targeting.

Ruling party legislator S B Dissanayake said the new constitutional powers would give President Gotabaya Rajapaksa the abilty to fix the economy as Prime Ministers Lee Kwan Yew of Singapore and Mahathir Mohammed of Malaysia has done.

But both Singapore and Malaysia had monetary stability with Monetary Authority of Singapore running modified currency board aimed at countering Federal Reserve policy errors currency appreciation, and the Bank Negara running a highly credible peg which broke only once in its history.

The last administration gave full independence to a central bank which had unanchored monetary policy (flexible exchange rate – no external anchor, flexible inflation targeting – wide domestic anchor) which led to two currency crises.

The monetary instability injected liquidity in 2018 despite tax hikes and energy price reform which had reduced the deficit, which analysts say showed conclusively that no fiscal correction can solve a debt crisis or boost growth unless monetary instability is checked.

In the face of the output shock coming from the 2018 monetary instability taxes were further cut in December 2019 worsening a revenue base as the country entered the Coronavirus crises.

Monetary instability had been a problem since 1951 when a soft-pegged exchange rate regime involving money printing had been set up leading to foreign exchange and import controls.

The 1978 constitution was also enacted to give the President authority to solve economic problems after the 1970s economic crisis that came in the wake of the most draconian import and exchange control seen in the country since the central bank was set up in 1952.

The economic controls of the 1970s also came after the collapse of the Bretton Woods system of soft-pegs in 1971 amid US money printing and targeting of an output gap. (Colombo/Oct23/2020 – Update III)

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